Mr. President, Mr. Speaker, members of the 104th Congress, my fellow
Americans: Again we are here in the sanctuary of democracy, and once again,
our democracy has spoken. So let me begin by congratulating all of you
here in the 104th Congress, and congratulating you, Mr. Speaker.

If we agree on nothing else tonight, we must agree that the American
people certainly voted for change in 1992 and in 1994. And as I look out
at you, I know how some of you must have felt in 1992.

I must say that in both years we didn't hear America singing, we heard
America shouting. And now all of us, Republicans and Democrats alike, must
say: We hear you. We will work together to earn the jobs you have given
us. For we are the keepers of the sacred trust, and we must be faithful
to it in this new and very demanding era.

Over 200 years ago, our founders changed the entire course of human
history by joining together to create a new country based on a single powerful
idea: "We hold these truths to be self-evident, that all men are created
equal, endowed by their Creator with certain inalienable rights, and among
these are life, liberty and the pursuit of happiness."

It has fallen to every generation since then to preserve that idea --
the American idea -- and to deepen and expand its meaning to new and different
times: To Lincoln and his Congress, to preserve the Union and to end slavery.
To Theodore Roosevelt and Woodrow Wilson, to restrain the abuses and excesses
of the Industrial Revolution, and to assert our leadership in the world.
To Franklin Roosevelt, to fight the failure and pain of the Great Depression,
and to win our country's great struggle against fascism. And to all our
presidents since, to fight the Cold War.

Especially, I recall two who struggled to fight that Cold War in partnership
with congresses where the majority was of a different party. To Harry Truman,
who summoned us to unparalleled prosperity at home, and who built the architecture
of the Cold War. And to Ronald Reagan, whom we wish well tonight, and who
exhorted us to carry on until the twilight struggle against communism was
won.

In another time of change and challenge, I had the honor to be the first
president to be elected in the post-Cold War era, an era marked by the
global economy, the information revolution, unparalleled change and opportunity
and insecurity for the American people.

I came to this hallowed chamber two years ago on a mission -- to restore
the American Dream for all our people and to make sure that we move into
the 21st century still the strongest force for freedom and democracy in
the entire world. I was determined then to tackle the tough problems too
long ignored. In this effort I am frank to say that I have made my mistakes,
and I have learned again the importance of humility in all human endeavor.
But I am also proud to say tonight that our country is stronger than it
was two years ago.

Record numbers -- record numbers of Americans are succeeding in the
new global economy. We are at peace and we are a force for peace and freedom
throughout the world. We have almost six million new jobs since I became
president, and we have the lowest combined rate of unemployment and inflation
in 25 years. Our businesses are more productive and here we have worked
to bring the deficit down, to expand trade, to put more police on our streets,
to give our citizens more of the tools they need to get an education and
to rebuild their own communities.

But the rising tide is not lifting all boats. While our nation is enjoying
peace and prosperity, too many of our people are still working harder and
harder, for less and less. While our businesses are restructuring and growing
more productive and competitive, too many of our people still can't be
sure of having a job next year or even next month. And far more than our
material riches are threatened; things far more precious too us -- ourchildren,
our families, our values.

Our civil life is suffering in America today. Citizens are working together
less and shouting at each other more. The common bonds of community which
have been the great strength of our country from its very beginning are
badly frayed. What are we to do about it?

More than 60 years ago, at the dawn of another new era, President Roosevelt
told our nation, "New conditions impose new requirements on government
and those who conduct government." And from that simple proposition, he
shaped the New Deal, which helped to restore our nation to prosperity and
define the relationship between our people and their government for half
a century.

That approach worked in its time. But we today, we face a very different
time and very different conditions. We are moving from an Industrial Age
built on gears and sweat to an Information Age demanding skills and learning
and flexibility. Our government, once a champion of national purpose, is
now seen by many as simply a captive of narrow interests, putting more
burdens on our citizens rather than equipping them to get ahead. The values
that used to hold us all together seem to be coming apart.

So tonight, we must forge a new social compact to meet the challenges
of this time. As we enter a new era, we need a new set of understandings,
not just with government, but even more important, with one another as
Americans.

That's what I want to talk with you about tonight. I call it the New
Covenant. But it's grounded in a very, very old idea -- that all Americans
have not just a right, but a solid responsibility to rise as far as their
God-given talents and determination can take them; and to give something
back to their communities and their country in return. Opportunity and
responsibility: They go hand in hand. We can't have one without the other.
And our national community can't hold together without both.

Our New Covenant is a new set of understandings for how we can equip
our people to meet the challenges of a new economy, how we can change the
way our government works to fit a different time, and, above all, how we
can repair the damaged bonds in our society and come together behind our
common purpose. We must have dramatic change in our economy, our government
and ourselves.

My fellow Americans, without regard to party, let us rise to the occasion.
Let us put aside partisanship and pettiness and pride. As we embark on
this new course, let us put our country first, remembering that regardless
of party label, we are all Americans. And let the final test of everything
we do be a simple one: Is it good for the American people?

Let me begin by saying that we cannot ask Americans to be better citizens
if we are not better servants. You made a good start by passing that law
which applies to Congress all the laws you put on the private sector, and
I was proud to sign it yesterday.

But we have a lot more to do before people really trust the way things
work around here. Three times as many lobbyists are in the streets and
corridors of Washington as were here 20 years ago. The American people
look at their capital and they see a city where the well-connected and
the well-protected can work the system, but the interests of ordinary citizens
are often left out.

As the new Congress opened its doors, lobbyists were still doing business
as usual -- the gifts, the trips, all the things that people are concerned
about haven't stopped. Twice this month you missed opportunities to stop
these practices. I know there were other considerations in those votes,
but I want to use something that I've heard my Republican friends say from
time to time -- there doesn't have to be a law for everything. So tonight,
I ask you to just stop taking the lobbyists' perks. Just stop.

We don't have to wait for legislation to pass to send a strong signal
to the American people that things are really changing. But I also hope
you will send me the strongest possible lobby reform bill, and I'll sign
that, too.

We should require lobbyists to tell the people for whom they work what
they're spending, what they want. We should also curb the role of big money
in elections by capping the cost of campaigns and limiting the influence
of PACs.

And as I have said for three years, we should work to open the airwaves
so that they can be an instrument of democracy, not a weapon of destruction
by giving free TV time to candidates for public office.

When the last Congress killed political reform last year, it was reported
in the press that the lobbyists actually stood in the halls of this sacred
building and cheered. This year, let's give the folks at home something
to cheer about.

More important, I think we all agree that we have to change the way
the government works. Let's make it smaller, less costly and smaller --
leaner, not meaner.

I just told the Speaker the equal time doctrine is alive and well.

The New Covenant approach to governing is as different from the old
bureaucratic way as the computer is from the manual typewriter. The old
way of governing around here protected organized interests. We should look
out for the interests of ordinary people. The old way divided us by interest,
constituency or class. The New Covenant way should unite us behind a common
vision of what's best for our country. The old way dispensed services through
large, top-down, inflexible bureaucracies. The New Covenant way should
shift these resources and decision-making from bureaucrats to citizens,
injecting choice and competition and individual responsibility into national
policy.

The old way of governing around here actually seemed to reward failure.
The New Covenant way should have built-in incentives to reward success.
The old way was centralized here in Washington. The New Covenant way must
take hold in the communities all across America. And we should help them
to do that.

Our job here is to expand opportunity, not bureaucracy; to empower people
to make the most of their own lives; and to enhance our security here at
home and abroad. We must not ask government to do what we should do for
ourselves. We should rely on government as a partner to help us to do more
for ourselves and for each other.

I hope very much that as we debate these specific and exciting matters,
we can go beyond the sterile discussion between the illusion that there
is somehow a program for every problem on the one hand, and the other illusion
that the government is a source of every problem we have. Our job is to
get rid of yesterday's government so that our own people can meet today's
and tomorrow's needs. And we ought to do it together.

You know, for years before I became president, I heard others say they
would cut government and how bad it was. But not much happened. We actually
did it. We cut over a quarter of a trillion dollars in spending, more than
300 domestic programs, more than 100,000 positions from the federal bureaucracy
in the last two years alone. Based on decisions already made, we will have
cut a total of more than a quarter of a million positions from the federal
government, making it the smallest it has been since John Kennedy was president,
by the time I come here again next year.

Under the leadership of Vice President Gore, our initiatives have already
saved taxpayers $63 billion. The age of the $500 hammer and the ashtray
you can break on David Letterman is gone. Deadwood programs, like mohair
subsidies, are gone. We've streamlined the Agriculture Department by reducing
it by more than 1,200 offices. We've slashed the small business loan form
from an inch thick to a single page. We've thrown away the government's
10,000-page personnel manual. And the government is working better in important
ways: FEMA, the Federal Emergency Management Agency, has gone from being
a disaster to helping people in disasters.

You can ask the farmers in the Middle West who fought the flood there
or the people in California who have dealt with floods and earthquakes
and fires, and they'll tell you that. Government workers, working hand
in hand with private business, rebuilt Southern California's fractured
freeways in record time and under budget. And because the federal government
moved fast, all but one of the 5,600 schools damaged in the earthquake
are back in business.

Now, there are a lot of other things that I could talk about. I want
to just mention one because it will be discussed here in the next few weeks.
University administrators all over the country have told me that they are
saving weeks and weeks of bureaucratic time now because of our direct college
loan program, which makes college loans cheaper and more affordable, with
better repayment terms for students, costs the government less, and cuts
out paperwork and bureaucracy for the government and for the universities.
We shouldn't cap that program. We should give every college in America
the opportunity to be a part of it.

Previous government programs gather dust. The reinventing government
report is getting results. And we're not through. There's going to be a
second round of reinventing government. We propose to cut $130 billion
in spending by shrinking departments, extending our freeze on domestic
spending, cutting 60public housing programs down to three, getting rid
of over 100 programs we do not need, like the Interstate Commerce Commission
and the Helium Reserve Program. And we're working on getting rid
of unnecessary regulations and making them more sensible. The programs
and regulations that have outlived their usefulness should go. We have
to cut yesterday's government to help solve tomorrow's problems.

And we need to get government closer to the people its meant to serve.
We need to help move programs down to the point where states and communities
and private citizens in the private sector can do a better job. If they
can do it, we ought to let them do it. We should get out of the way and
let them do what they can do better.

Taking power away from federal bureaucracies and giving it back to communities
and individuals is something everyone should be able to be for. It's time
for Congress to stop passing on to the state the cost of decisions we make
here in Washington.

I know there are still serious differences over the details of the unfunded
mandates legislation, but I want to work with you to make sure we pass
a reasonable bill which will protect the national interests and give justified
relief where we need to give it.

For years, Congress concealed in the budget scores of pet spending projects.
Last year was no different. There was a $1 million to study stress in plants,
and $12 million for a tick removal program that didn't work. It's hard
to remove ticks; those of us who have had them know. But, I'll tell you
something; if you'll give me the line-item veto, I'll remove some of that
nnecessary spending.

But I think we should all remember, and almost all of us would agree,
that government still has important responsibilities. Our young people
-- we should think of this when we cut -- our young people hold our future
in their hands. We still owe a debt to our veterans. And our senior
citizens have made us what we are.

Now, my budget cuts a lot. But it protects education, veterans, Social
Security and Medicare -- and I hope you will do the same thing. You
should, and I hope you will.

And when we give more flexibility to the states, let us remember that
there are certain fundamental national needs that should be addressed in
every state, north and south, east and west -- immunization against childhood
disease -- school lunches in all our schools -- Head Start, medical care
and nutrition for pregnant women and infants -- medical care and nutrition
for pregnant women and infants. All these things -- all these things
are in the national interest.

I applaud your desire to get rid of costly and unnecessary regulations.
But when we deregulate, let's remember what national action in the national
interest has given us: safer foods for our families, safer toys for our
children, safer nursing homes for our parents, safer cars and highways,
and safer workplaces, clean air and cleaner water. Do we need common sense
and fairness in our regulations? You bet we do. But we can have common
sense and still provide for safe drinking water. We can have fairness and
still clean up toxic dumps, and we ought to do it.

Should we cut the deficit more? Well, of course, we should. Of course,
we should. But we can bring it down in a way that still protects our economic
recovery and does not unduly punish people who should not be punished,
but instead should be helped.

I know many of you in this chamber support the balanced budget amendment.
I certainly want to balance the budget. Our administration has done more
to bring the budget down and to save money than any in a very, very long
time. If you believe passing this amendment is the right thing to
do, then you have to be straight with the American people. They have a
right to know what you're going to cut, what taxes you're going to raise,
and how it's going to affect them.

We should be doing things in the open around here. For example, everybody
ought to know if this proposal is going to endanger Social Security.
I would oppose that, and I think most Americans would.

Nothing is done more to undermine our sense of common responsibility
than our failed welfare system. This is one of the problems we have to
face here in Washington in our New Covenant. It rewards welfare over work.
It undermines family values. It lets millions of parents get away without
paying their child support. It keeps a minority, but a significant minority
of the people on welfare trapped on it for a very long time.

I worked on this problem for a long time, nearly 15 years now. As a
governor I had the honor of working with the Reagan administration to write
the last welfare reform bill back in 1988. In the last two years we made
a good start in continuing the work of welfare reform. Our administration
gave two dozen states the right to slash through federal rules and regulations
to reform their own welfare systems, and to try to promote work and responsibility
over welfare and dependency.

Last year I introduced the most sweeping welfare reform plan ever presented
by an administration. We have to make welfare what it was meant to be --
a second chance, not a way of life. We have to help those on welfare move
to work as quickly as possible, to provide child care and teach them skills
if that's what they need for up to two years. And after that, there ought
to be a simple hard rule: anyone who can work must go to work. If
a parent isn't paying child support, they should be forced to pay.
We should suspend drivers' licenses, track the across state lines, make
them work off what they owe. That is what we should do. Governments do
not raise children, people do. And the parents must take responsibility
for the children they bring into this world.

I want to work with you, with all of you, to pass welfare reform. But
our goal must be to liberate people and lift them up, from dependence to
independence, from welfare to work, from mere childbearing to responsible
parenting. Our goal should not be to punish them because they happen to
be poor.

We should -- we should require work and mutual responsibility. But we
shouldn't cut people off just because they're poor, they're young, or even
because they're unmarried. We should promote responsibility by requiring
young mothers to live at home with their parents or in other supervised
settings, by requiring them to finish school. But we shouldn't put them
and their children out on the street.

And I know all the arguments, pro and con, and I have read and thought
about this for a long time. I still don't think we can in good conscious
punish poor children for the mistakes of their parents. My fellow
Americans, every single survey shows that all the American people care
about this without regard to party or race or region. So let this be the
year we end welfare as we know it. But also let this be the year that we
are all able to stop using this issue to divide America.

No one is more eager to end welfare -- I may be the only president who
has actually had the opportunity to sit in a welfare office, who's actually
spent hours and hours talking to people on welfare. And I am telling you,
people who are trapped on it know it doesn't work. They also want to get
off. So we can promote together education and work and good parenting.
I have no problem with punishing bad behavior or the refusal to be a worker
or a student, or a responsible parent. I just don't want to punish poverty
and past mistakes. All of us have made our mistakes, and none of us can
change our yesterdays. But every one of us can change our tomorrows.

And America's best example of that may be Lynn Woolsey, who worked her
way off welfare to become a congresswoman from the state of California.

I know the members of this Congress are concerned about crime, as are
all the citizens of our country. And I remind you that last year, we passed
a very tough crime bill -- longer sentences, three strikes and you're out,
almost 60 new capital punishment offenses, more prisons, more prevention,
100,000 more police. And we paid for it all by reducing the size of the
federal bureaucracy and giving the money back to local communities to lower
the crime rate.

There may be other things we can do to be tougher on crime, to be smarter
with crime, to help to lower that rate first. Well, if there are, let's
talk about them and let's do them. But let's not go back on the things
that we did last year that we know work; that we know work because the
local law enforcement officers tell us that we did the right things, because
local community leaders who have worked for years and years to lower the
crime rate tell us that they work.

Let's look at the experience of our cities and our rural areas where
the crime rate has gone down and ask the people who did it how they did
it. And if what we did last year supports the decline in the crime rate
-- and I am convinced that it does -- let us not go back on it. Let's stick
with it, implement it. We've got four more hard years of work to do to
do that.

I don't want to destroy the good atmosphere in the room or in the country
tonight, but I have to mention one issue that divided this body greatly
last year. The last Congress also passed the Brady Bill and, in the crime
bill, the ban on 19 assault weapons. I don't think it's a secret to anybody
in this room that several members of the last Congress who voted for that
aren't here tonight because they voted for it. And I know, therefore,
that some of you who are here because they voted for it are under enormous
pressure to repeal it. I just have to tell you how I feel about it.

The members of Congress who voted for that bill and I would never do
anything to infringe on the right to keep and bear arms to hunt and to
engage in other appropriate sporting activities. I've done it since I was
a boy, and I'm going to keep right on doing it until I can't do it anymore.
But a lot of people laid down their seats in Congress so that police officers
and kids wouldn't have to lay down their lives under a hail of assault
weapon attack -- and I will not let that be repealed. I will not let it
be
repealed.

I'd like to talk about a couple of other issues we have to deal with.
I want us to cut more spending, but I hope we won't cut government programs
that help to prepare us for the new economy, promote responsibility and
are organized from the grass roots up, not by federal bureaucracy. The
very best example of this is the National Service Corps -- AmeriCorps.

It passed with strong bipartisan support. And now there are 20,000 Americans,
more than every served in one year in the Peace Corps, working all over
this country, helping people person to person in local, grass-roots volunteer
groups, solving problems and, in the process, earning some money for their
education. This is citizenship at its best. It's good for the AmeriCorps
members, but it's good for the rest of us, too. It's the essence of the
New Covenant, and we shouldn't stop it.

All Americans, not only in the states most heavily affected, but in
every place in this country, are rightly disturbed by the large numbers
of illegal aliens entering our country. The jobs they hold might otherwise
be held by citizens or legal immigrants. The public service they use impose
burdens on our taxpayers. That's why our administration has moved aggressively
to secure our borders more by hiring a record number of new border guards,
by deporting twice as many criminal aliens as ever before, by cracking
down on illegal hiring, by barring welfare benefits to illegal aliens.

In the budget I will present to you we will try to do more to speed
the deportation of illegal aliens who are arrested for crimes, to better
identify illegal aliens in the workplace as recommended by the commission
headed by former Congresswoman Barbara Jordan.

We are a nation of immigrants. But we are also a nation of laws. It
is wrong and ultimately self-defeating for a nation of immigrants to permit
the kind of abuse of our immigration laws we have seen in recent years,
and we must do more to stop it.

The most important job of our government in this new era is to empower
the American people to succeed in the global economy. America has always
been a land of opportunity, a land where, if you work hard, you can get
ahead. We've become a great middle class country. Middle class values sustain
us. We must expand that middle class, and shrink the underclass, even as
we do everything we can to support the millions of Americans who are already
successful in the new economy.

America is once again the world's strongest economic power, almost six
million new jobs in the last two years, exports
booming, inflation down, high-wage jobs are coming back. A record number
of American entrepreneurs are living the American Dream. If we want it
to stay that way, those who work and lift our nation must have more of
its benefits.

Today, too many of those people are being left out. They're working
harder for less. They have less security, less income, less certainty that
they can even afford a vacation, much less college for their kids or retirement
for themselves. We cannot let this continue.

If we don't act, our economy will probably keep doing what it's been
doing since about 1978, when the income growth began to go to those at
the very top of our economic scale and the people in the vast middle got
very little growth, and people who worked like crazy but were on the bottom
then fell even further and further behind in the years afterward -- no
matter how hard they worked.

We've got to have a government that can be a real partner in making
this new economy work for all of our people; a government that helps each
and every one of us to get an education, and to have the opportunity to
renew our skills. That's why we worked so hard to increase educational
opportunities in the last two years -- from Head Start to public schools,
to apprenticeships for young people who don't go to college, to making
college loans more available and more affordable. That's the first thing
we have to do. We've got to do something to empower people to improve their
skills.

The second thing we ought to do is to help people raise their incomes
immediately by lowering their taxes. We took the first step in 1993 with
a working family tax cut for 15 million families with incomes under $27,000;
a tax cut that this year will average about $1,000 a family. And we also
gave tax reductions to most small and new businesses.

Before we could do more than that, we first had to bring down the deficit
we inherited, and we had to get economic growth up. Now we've done both.
And now we can cut taxes in a more comprehensive way. But tax cuts should
reinforce and promote our first obligation -- to empower our citizens through
education and training to make the most of their own lives.

The spotlight should shine on those who make the right choices for themselves,
their families and their communities. I have proposed the Middle Class
Bill of Rights, which should properly be called the Bill of Rights and
Responsibilities because its provisions only benefit those who are working
to educate and raise their children and to educate themselves. It will,
therefore, give needed tax relief and raise incomes in both the short run
and the long run in a way that benefits all of us.

There are four provisions. First, a tax deduction for all education
and training after high school. If you think about it, we permit
businesses to deduct their investment, we permit individuals to deduct
interest on their home mortgages, but today an education is even more important
to the economic well-being of our whole country than even those things
are. We should do everything we can to encourage it. And I hope you will
support it.

Second, we ought to cut taxes, $500 for families with children under
13.

Third, we ought to foster more savings and personal responsibility by
permitting people to establish an Individual Retirement Account and withdraw
from it tax free for the cost of education, health care, first-time home-buying
or the care of a parent.

And fourth, we should pass a G.I. Bill for America's workers. We propose
to collapse nearly 70 federal programs and not give the money to the states,
but give the money directly to the American people; offer vouchers to them
so that they, if they're laid off or if they're working for a very low
wage, can get a voucher worth $2,600 a year for up to two years to go to
their local community colleges or wherever else they want to get the skills
they need to improve their lives. Let's empower people in this way. Move
it from the government directly to the workers of America.

Now, any one of us can call for a tax cut, but I won't accept one that
explodes the deficit or puts our recovery at risk. We ought to pay for
our tax cuts fully and honestly.

Just two years ago, it was an open question whether we would find the
strength to cut the deficit. Thanks to the courage of the people who were
here then, many of whom didn't return, we did cut the deficit. We began
to do what others said would not be done. We cut the deficit by over $600
billion, about $10,000 for every family in this country. It's coming down
three years in a row for the first time since Mr. Truman was president,
and I don't think anybody in America wants us to let it explode again.

In the budget I will send you, the Middle Class Bill of Rights is fully
paid for by budget cuts in bureaucracy, cuts in programs, cuts in special
interest subsidies. And the spending cuts will more than double the tax
cuts. My budget pays for the Middle Class Bill of Rights without any cuts
in Medicare. And I will oppose any attempts to pay for tax cuts with Medicare
cuts. That's not the right thing to do.

I know that a lot of you have your own ideas about tax relief, and some
of them I find quite interesting. I really want to work with all of you.
My test for our proposals will be: Will it create jobs and raise incomes?
Will it strengthen our families and support our children? Is it paid for?
Will it build the middle class and shrink the underclass? If it does, I'll
support it. But if it doesn't, I won't.

The goal of building the middle class and shrinking the underclass is
also why I believe that you should raise the minimum wage. It rewards
work. Two and a half million Americans -- 2.5 million Americans, often
women with children, are working out there today for $4.25 an hour. In
terms of real buying power, by next year that minimum wage will be at a
40-year low. That's not my idea of how the new economy ought to work.

Now, I've studied the arguments and the evidence for and against a minimum
wage increase. I believe the weight of the evidence is that a modest increase
does not cost jobs, and may even lure people back into the job market.
But the most important thing is, you can't make a living on $4.25 an hour.
Especially if you have children, even with the working families tax cut
we passed last year. In the past, the minimum wage has been a bipartisan
issue, and I think it should be again. So I want to challenge you to have
honest hearings on this; to get together; to find a way to make the minimum
wage a living wage.

Members of Congress have been here less than a month, but by the end
of the week, 28 days into the new year, every member of Congress will have
earned as much in congressional salary as a minimum wage worker makes all
year long.

Everybody else here, including the President, has something else that
too many Americans do without, and that's health care. Now, last year,
we almost came to blows over health care. But we didn't do anything. And
the cold, hard fact is that, since last year, since I was here, another
1.1 million Americans in working families have lost their health care.
And the cold, hard fact is that many millions more, most of them farmers
and small businesspeople and self-employed people, have seen their premiums
skyrocket, their co-pays and deductibles go up. There's a whole bunch of
people in this country that, in the statistics have health insurance, but
really what they've got is a piece of paper that says they won't lose their
home if they get sick.

Now, I still believe our country has got to move toward providing health
security for every American family. But I know that last year, as the evidence
indicates, we bit off more than we could chew. So I'm asking you that we
work together. Let's do it step by step. Let's do whatever we have to do
to get something done. Let's at least pass meaningful insurance reform
so that no American risks losing coverage for facing skyrocketing prices.
That nobody loses their coverage because they face high prices or unavailable
insurance, when they change jobs and lose a job, or a family member gets
sick.

I want to work together with all of you who have an interest in this
-- with the Democrats who worked on it last time, with the Republican leaders
like Senator Dole who has a longtime commitment to health care reform and
made some constructive proposals in this area last year. We ought to make
sure that self-employed people in small businesses can buy insurance at
more affordable rates through voluntary purchasing pools. We ought to help
families provide long-term care for a sick parent or a disabled child.
We can work to help workers who lose their jobs at least keep their health
insurance coverage for a year while they look for work. And we can find
a way -- it may take some time, but we can find a way -- to make sure that
our children have health care.

You know, I think everybody in this room, without regard to party, can
be proud of the fact that our country was rated as having the world's most
productive economy for the first time in nearly a decade. But we can't
be proud of the fact that we're the only wealthy country in the world that
has a smaller percentage of the work force and their children with health
insurance today than we did 10 years ago, the last time we were the most
productive economy in the world. So let's work together on this. It is
too important for politics as usual.

Much of what the American people are thinking about tonight is what
we've already talked about. A lot of people think that the security concerns
of America today are entirely internal to our borders. They relate to the
security of our jobs and our homes, and our incomes and our children, our
streets, our health and protecting those borders. Now that the Cold War
has passed, it's tempting to believe that all the security issues, with
the possible exception of trade, reside here at home. But it's not so.
Our security still depends upon our continued world leadership for peace
and freedom and democracy. We still can't be strong at home unless we're
strong abroad.

The financial crisis in Mexico is a case in point. I know it's not popular
to say it tonight, but we have to act. Not for the Mexican people, but
for the sake of the millions of Americans whose livelihoods are tied to
Mexico's well-being. If we want to secure American jobs, preserve American
exports, safeguard America's borders, then we must pass the stabilization
program and help to put Mexico back on track.

Now let me repeat: it's not a loan, it's not foreign aid, it's not a
bail out. We will be given a guarantee like co-signing a note with good
collateral that will cover our risks. This legislation is the right thing
for America. That's why the bipartisan leadership has supported it. And
I hope you in Congress will pass it quickly. It is in our interest, and
we can explain it to the American people, because we're going to do it
in the right way.

You know, tonight, this is the first State of the Union address ever
delivered since the beginning of the Cold War when not a single Russian
missile is pointed at the children of America. And along with the Russians,
we're on the way to destroying the missiles and the bombers that carry
9,000 nuclear warheads. We've come so far so fast in this post-Cold War
world that it's easy to take the decline of the nuclear threat for granted.
But it's still there, and we aren't finished yet.

This year I'll ask the Senate to approve START II, to eliminate weapons
that carry 5,000 more warheads. The United States will lead the charge
to extend indefinitely the nuclear Nonproliferation Treaty -- to enact
a comprehensive nuclear test ban -- and to eliminate chemical weapons.
To stop and roll back North Korea's potentially deadly nuclear program,
we'll continue to implement the agree we have reached with that nation.
It's smart; it's tough; it's a deal based on continuing inspection with
safeguards for our allies and ourselves.

This year I'll submit to Congress comprehensive legislation to strengthen
our hand in combatting terrorists --whether they strike at home or abroad.
As the coward's who bombed the World Trade Center found out, this country
will hunt down terrorists and
bring them to justice.

Just this week, another horrendous terrorist act in Israel killed 19
and injured scores more. On behalf of the American people and all of you,
I send our deepest sympathy to the families of the victims. I know that
in the face of such evil, it is hard for the people in the Middle East
to go forward. But the terrorists represent the past, not the future. We
must and we will pursue a comprehensive peace between Israel and all her
neighbors in the Middle East.

Accordingly, last night I signed an executive order that will block
the assets in the United States of terrorist organizations that threaten
to disrupt the peace process. It prohibits financial transactions with
these groups. And tonight I call on our allies and peace-loving nations
throughout the world to join us with renewed fervor in a global effort
to combat terrorism. We cannot permit the future to be marred by terror
and fear and paralysis.

From the day I took the oath of office, I pledged that our nation would
maintain the best-equipped, best-trained and best-prepared military on
Earth. We have, and they are. They have managed the dramatic downsizing
of our forces after the Cold War with remarkable skill and spirit. But
to make sure our military is ready for action, and to provide the pay and
the quality of life the military and their families deserve, I'm asking
the Congress to add $25 billion in defense spending over the next six years.

I have visited many bases at home and around the world, since I became
president. Tonight, I repeat that request with renewed conviction. We ask
a very great deal of our Armed Forces. Now that they are smaller in number,
we ask more of them. They go out more often to more different places and
stay longer. They are called to service in many, many ways. And we must
give them and their families what the times demand and what they have earned.

Just think about what our troops have done in the last year, showing
America at its best -- helping to save hundreds of thousands of people
in Rwanda, moving with lightning speech to head off another threat to Kuwait,
giving freedom and democracy back to the people of Haiti.

We have proudly supported peace and prosperity and freedom from South
Africa to Northern Ireland, from Central and Eastern Europe to Asia, from
Latin America to the Middle East. All these endeavors are good in those
places, but they make our future more confident and more secure.

Well, my fellow Americans, that's my agenda for America's future: Expanding
opportunity, not bureaucracy; enhancing security at home and abroad; empowering
our people to make the most of their own lives. It's ambitious and achievable,
but it's not enough. We even need more than new ideas for changing the
world or equipping Americans to compete in the new economy; more than a
government that's smaller, smarter and wiser; more than all the changes
we can make in government and in the private sector from the outside in.

Our fortunes and our posterity also depend upon our ability to answer
some questions from within -- from the values and voices that speak to
our hearts as well as our heads; voices that tell us we have to do more
to accept responsibility for ourselves and our families, for our communities,
and, yes, for our fellow citizens. We see our families and our communities
all over this country coming apart. And we feel the common ground shifting
from under us. The PTA, the town hall meeting, the ball park -- it's hard
for a lot of overworked parents to find the time and space for those things
that strengthen the bonds of trust and cooperation. Too many of our children
don't even have parents and grandparents who can give them those experiences
that they need to build their own character and their sense of identity.

We all know what while we here in this chamber can make a difference
on those things, that the real differences will be made by our fellow citizens
-- where they work and where they live. And it will be made almost without
regard to party. When I used to go to the softball park in Little Rock
to watch my daughter's league, and people would come up to me, fathers
and mothers, and talk to me, I can honestly say I had no idea whether 90
percent of them were Republicans or Democrats. When I visited the relief
centers after the floods in California -- Northern California -- last week,
a woman came up to me and did something that very few of you would do --
she hugged me and said, "Mr. President, I'm a Republican, but I'm glad
you're here."

Now, why? We can't wait for disasters to act the way we used to act
every day. Because as we move into this next century, everybody matters;
we don't have a person to waste. And a lot of people are losing a lot of
chances to do better. That means that we need a New Covenant for everybody.

For our corporate and business leaders, we're going to work here to
keep bringing the deficit down, to expand markets, to support their success
in every possible way. But they have an obligation when they're doing well
to keep jobs in our communities and give their workers a fair share of
the prosperity they generate.

For people in the entertainment industry in this country, we applaud
your creativity and your world-wide success, and we support your freedom
of expression. But you do have a responsibility to assess the impact of
your work and to understand the damage that comes from the incessant, repetitive,
mindless violence and irresponsible conduct that permeates our media all
the
time.

We've got to ask our community leaders and all kinds of organizations
to help us stop our most serious social problem: the epidemic of teen pregnancies
and births where there is no marriage. I have sent to Congress a plan to
targets schools all over this country with anti-pregnancy programs that
work. But government can only do so much. Tonight, I call on parents and
leaders all across this country to join together in a national campaign
against teen pregnancy to make a difference. We can do this, and we must.

And I would like to say a special word to our religious leaders. You
know, I'm proud of the fact the United States has more houses of worship
per capita than any country in the world. These people who lead our houses
of worship can ignite their congregations to carry their faith into action;
can reach out to all of our children, to all of the people in distress,
to those who have been savaged by the breakdown of all we hold dear. Because
so much of what we've done must come from the inside out, and our religious
leaders and their congregations can make all the difference. They have
a role in the New Covenant as well.

There must be more responsibility for all of our citizens. You know,
it takes a lot of people to help all the kids in trouble stay off the streets
and in school. It takes a lot of people to build the Habitat for Humanity
houses that the Speaker celebrates on his lapel pin. It takes a lot of
people to provide the people power for all of the civic organizations in
this country that made our communities mean so much to most of us when
we were kids. It takes every parent to teach the children the difference
between right and wrong and to encourage them to learn and grow; and to
say no to the wrong things, but also to believe that they can be whatever
they want to be.

I know it's hard when you're working harder for less, when you're under
great stress to do these things. A lot of our people don't have the time
or the emotional stress they think to do the work of citizenship.

Most of us in politics haven't helped very much. For years, we've mostly
treated citizens like they were consumers or spectators, sort of political
couch potatoes who were supposed to watch the TV ads, either promise them
something for nothing or play on their fears and frustrations. And more
and more of our citizens now get most of their information in very negative
and aggressive ways that are hardly conducive to honest and open conversations.
But the truth is, we have got to stop seeing each other as enemies, just
because we have different views.

If you go back to the beginning of this country, the great strength
of America, as de Tocqueville pointed out when he came here a long time
ago, has always been our ability to associate with people who were different
from ourselves and to work together to find common ground. And in this
day, everybody has a responsibility to do more of that. We simply cannot
wait for a tornado, a fire, or a flood to behave like Americans ought to
behave in dealing with one another.

I want to finish up here by pointing out some folks that are up with
the First Lady that represent what I'm trying to talk about -- citizens.
I have no idea what their party affiliation is or who they voted for in
the last election. But they represent what we ought to be doing.

Cindy Perry teaches second graders to read in AmeriCorps in rural Kentucky.
She gains when she gives. She's a mother of four. She says that her service
inspired her to get her high school equivalency last year. She was married
when she was a teenager. Stand up, Cindy. She was married when she was
a teenager. She had four children, but she had time to serve other people,
to get her high school equivalency. And she's going to use her AmeriCorps
money to go back to college.

Stephen Bishop is the police chief of Kansas City. He's been a national
leader. Stand up -- He's been a national leader in using more police
in community policing, and he's worked with AmeriCorps to do it. And the
crime rate in Kansas City has gone down as a result of what he did.

Corporal Gregory Depestre went to Haiti as part of his adopted country's
force to help secure democracy in his native land. And I might add, we
must be the only country in the world that could have gone to Haiti and
taken aitian-Americans there who could speak the language and talk
to the people. And he was one of them, and we're proud of him.

The next two folks I've had the honor of meeting and getting to know
a little bit, the Reverend John and the Reverend Diana Cherry of the AME
Zion Church in Temple Hills, Maryland. I'd like to ask them to stand. I
want to tell you about them. In the early '80s, they left government service
and formed a church in a small living room in a small house, in the early
'80s. Today that church has 17,000 members. It is one of the three or four
biggest churches in the entire United States. It grows by 200 a month.
They do it together. And the special focus of their ministry is keeping
families together.

Two things they did make a big impression on me. I visited their church
once, and I learned they were building a new sanctuary closer to the Washington,
D.C., line in a higher crime, higher drug rate area because they thought
it was part of their ministry to change the lives of the people who needed
them.

The second thing I want to say is, that once Reverend Cherry was at
a meeting at the White House with some other religious leaders, and he
left early to go back to his church to minister to 150 couples that he
had brought back to his church from all over America to convince them to
come back together, to save their marriages, and to raise their kids. This
is the kind of work that citizens are doing in America. We need more of
it, and it ought to be lifted up and supported.

The last person I want to introduce is Jack Lucas from Hattiesburg,
Mississippi. Jack, would you stand up? Fifty years ago, in the sands of
Iwo Jima, Jack Lucas taught and learned the lessons of citizenship. On
February the 20th, 1945, he and three of his buddies encountered the enemy
and two grenades at their feet. Jack Lucas threw himself on both of them.
In that moment, he saved the lives of his companions, and miraculously
in the next instant, a medic saved his life. He gained a foothold for freedom,
and at the age of 17, just a year older than his grandson, who is up there
with him today, and his son, who is a West Point graduate and a veteran,
at 17, Jack Lucas became the youngest Marine in history and the youngest
soldier in this century to win the Congressional Medal of Honor.

All these years later, yesterday, here's what he said about that day:
"It didn't matter where you were from or who you were, you relied on one
another. You did it for your country."

We all gain when we give, and we reap what we sow. That's at the heart
of this New Covenant -- responsibility, opportunity and citizenship. More
than stale chapters in some remote civics book; they're still the virtue
by which we can fulfill ourselves and reach our God-given potential and
be like them; and also to fulfill the eternal promise of this country --
the enduring dream from that first and most sacred covenant.

I believe every person in this country still believes that we are created
equal, and given by our Creator, the right to life, liberty and the pursuit
of happiness. This is a very, very great country. And our best days are
still to come.